-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F4Y3vrFBqr/vgqbBPaC7UDcCpHptUmfiPCUKokLd4GZId04MyQBzXSuCoMVlAEOd aQgg8DBDke99BSc71aeOzg== 0000950172-05-000291.txt : 20050131 0000950172-05-000291.hdr.sgml : 20050131 20050128175539 ACCESSION NUMBER: 0000950172-05-000291 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050128 ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050131 DATE AS OF CHANGE: 20050128 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RAYOVAC CORP CENTRAL INDEX KEY: 0001028985 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690] IRS NUMBER: 222423556 STATE OF INCORPORATION: WI FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13615 FILM NUMBER: 05559461 BUSINESS ADDRESS: STREET 1: 6 CONCOURSE PARKWAY STREET 2: SUITE 3300 CITY: ATLANTA STATE: 2Q ZIP: 30328 BUSINESS PHONE: 7708296200 MAIL ADDRESS: STREET 1: 6 CONCOURSE PARKWAY STREET 2: SUITE 3300 CITY: ATLANTA STATE: 2Q ZIP: 30328 8-K 1 bos329194.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: January 28, 2005 --------------------------------- (Date of earliest event reported) RAYOVAC CORPORATION -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Wisconsin 001-13615 22-2423556 - ------------------------------- --------------------- ------------------ (State or other Jurisdiction of (Commission File No.) (IRS Employer Incorporation) Identification No.) Six Concourse Parkway, Suite 3300, Atlanta, Georgia 30328 ------------------------------------------------------------ (Address of principal executive offices, including zip code) (770) 829-6200 ---------------------------------------------------- (Registrant's telephone number, including area code) Not Applicable ------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 7.01. REGULATION FD DISCLOSURE. The following information is being furnished pursuant to this Item 7.01 and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing. In connection with a proposed financing to be undertaken by Rayovac in connection with the proposed acquisition of United Industries Corporation, certain financial data was provided to potential financing sources. The Company is furnishing the information by attaching it as Exhibits 99.1 through 99.4 hereto. As used in the attached Exhibits 99.1 through 99.4, unless the context indicates otherwise, "Rayovac" refers to Rayovac Corporation together with its subsidiaries, "United" refers to United Industries Corporation together with its subsidiaries, "Microlite" refers to Microlite S.A. together with its subsidiaries, "Nu-Gro" refers to The Nu-Gro Corporation together with its subsidiaries and "United Pet Group" refers to United Pet Group, Inc. together with its subsidiaries. Item 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits Exhibit Number Description of Exhibit ------- ---------------------- 99.1 United Industries Corporation Unaudited Pro Forma Condensed Combined Financial Information for the Nine Months Ended September 30, 2004 and the Year Ended December 31, 2003 99.2 Summary Unaudited Pro Forma Condensed Consolidated Financial Data as of and for the Fiscal Year Ended September 30, 2004 99.3 Summary Financial Data - United, as of and for the Fiscal Years Ended December 31, 2001, 2002 and 2003 and as of and for the Nine Months Ended September 30, 2003 (as Restated) and 2004 99.4 Unaudited Pro Forma Condensed Consolidated Financial Data as of and for the Fiscal Year Ended September 30, 2004 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 28, 2005 RAYOVAC CORPORATION By: /s/ Randall J. Steward ----------------------------------- Name: Randall J. Steward Title: Executive Vice President and Chief Financial Officer 3 EXHIBIT INDEX Exhibit Number Description of Exhibit ------- ---------------------- 99.1 United Industries Corporation Unaudited Pro Forma Condensed Combined Financial Information for the Nine Months Ended September 30, 2004 and the Year Ended December 31, 2003 99.2 Summary Unaudited Pro Forma Condensed Consolidated Financial Data as of and for the Fiscal Year Ended September 30, 2004 99.3 Summary Financial Data - United, as of and for the Fiscal Years Ended December 31, 2001, 2002 and 2003 and as of and for the Nine Months Ended September 30, 2003 (as Restated) and 2004 99.4 Unaudited Pro Forma Condensed Consolidated Financial Data as of and for the Fiscal Year Ended September 30, 2004 4 EX-99 2 rv99-1.txt EXHIBIT 99.1 EXHIBIT 99.1 United Industries Corporation Unaudited Pro Forma Condensed Combined Financial Information For the Nine Months Ended September 30, 2004 and For the Year Ended December 31, 2003 (Dollars in thousands, except where indicated) The following unaudited pro forma condensed combined financial information related to United Industries Corporation (United Industries or the Company) and its acquisition of The Nu-Gro Corporation (Nu-Gro) and its merger with and into United Pet Group, Inc. (UPG) is included for the nine months ended September 30, 2004 and for the year ended December 31, 2003. The acquisition of Nu-Gro closed on April 30, 2004 and the acquisition of UPG closed on July 30, 2004; the information regarding the transactions, including required financial and pro forma financial information has been previously filed with the U.S. Securities and Exchange Commission. The respective purchase price allocations ascribed to the Nu-Gro and UPG acquisitions have been presented in the Company's Form 10-Q for the third quarter of 2004, previously filed with the U.S. Securities and Exchange Commission. The pro forma information contained herein includes the required pro forma operating results of Nu-Gro and UPG. The unaudited pro forma condensed combined financial information presents how the combined financial statements of (1) United Industries, a manufacturer and marketer of value-oriented products for the consumer lawn and garden care and household insect control markets in the United States, (2) Nu-Gro, a manufacturer and marketer of consumer lawn and garden products and supplier of controlled release nitrogen and other fertilizer technologies in Canada, and (3) UPG, a privately held marketer and manufacturer of premium branded pet supplies, may have appeared had the businesses actually been combined at the beginning of the periods presented herein. The unaudited pro forma condensed combined financial information shows the impact of the acquisitions of Nu-Gro and UPG on the Company's historical results of operations under the purchase method of accounting with United Industries treated as the acquirer. Under this method of accounting, United Industries recorded the assets and liabilities of Nu-Gro and UPG at their estimated fair values as of April 30, 2004 and July 30, 2004, respectively, the respective dates the acquisitions were completed. The unaudited pro forma condensed combined income statements present the historical financial information of United Industries, Nu-Gro, and UPG for the nine months ended September 30, 2004 and the year ended December 31, 2003 and give effect to the acquisitions as if they had been completed at the beginning of the periods presented. The unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with the historical consolidated financial statements and the related notes of United Industries, as filed in its quarterly and annual reports with the U.S. Securities and Exchange Commission, and the historical consolidated financial statements and the related notes of Nu-Gro and UPG. The unaudited pro forma condensed combined financial information includes estimated adjustments to record the assets and liabilities of Nu-Gro and UPG at their respective fair values and represents management's estimates based on available information. The final allocation of the purchase price will be determined upon completion of a final valuation, from an independent third-party valuation firm, to determine the fair values of Nu-Gro's and UPG's tangible and identifiable intangible assets and liabilities as of the acquisition date. Increases or decreases in the fair value of the net assets, commitments, executory contracts and other items of Nu-Gro and UPG may change the amount of the purchase price allocated to goodwill and other assets and liabilities and may impact the income statements due to adjustments in yield or amortization of the adjusted assets or liabilities. The unaudited pro forma condensed combined financial information is not necessarily indicative of the results of operations that would have resulted had the acquisitions been completed at the beginning of the periods presented, nor is it indicative of the results of operations in future periods of the combined companies. In addition, the allocations of the purchase prices which impact the income statements are subject to adjustment and may vary materially from the actual purchase price allocations that will be recorded upon receipt of a final independent third-party valuation report.
United Industries Corporation Pro Forma Condensed Combined Income Statement Nine Months Ended September 30, 2004 ($ in Thousands) United United United Pet The Nu-Gro Pro Forma Industries Industries(1) Group(2) Corporation(3) Adjustments Combined ---------- ---------- ------------ ----------- ----------- Net sales.......................... $ 593,578 $ 142,333 $ 67,234 $ - $ 803,145 Cost of goods sold................. 392,776 96,366 51,443 5,904 (4) 546,489 ---------- ---------- ------------ ----------- ----------- Gross profit....................... 200,802 45,967 15,791 (5,904) 256,656 Operating expenses................. 138,152 41,992 7,375 208 (5) 187,727 ---------- ---------- ------------ ----------- ----------- Income from operations............. 62,650 3,975 8,416 (6,112) 68,929 Interest expense, net.............. 33,940 5,020 413 320 (6) 39,693 ---------- ---------- ------------ ----------- ----------- Income (loss) before income taxes.. 28,710 (1,045) 8,003 (6,432) 29,236 Income tax expense (benefit)....... 7,447 2,694 2,937 (2,444) (7) 10,634 ---------- ---------- ------------ ----------- ----------- Net income (loss).................. $ 21,263 $ (3,739) $ 5,066 $ (3,988) $ 18,602 ========== ========== ============ =========== ===========
United Industries Corporation Pro Forma Condensed Combined Income Statement Year Ended December 31, 2003 ($ in Thousands) United United United Pet The Nu-Gro Pro Forma Industries Industries(1) Group(2) Corporation(3) Adjustments Combined ---------- ---------- ------------ ----------- ----------- Net sales.......................... $ 536,146 $ 231,974 $ 155,193 $ - $ 923,313 Cost of goods sold................. 328,238 155,748 117,293 7,918 (4) 609,197 ----------- ---------- ------------ ----------- ----------- Gross profit....................... 207,908 76,226 37,900 (7,918) 314,116 Operating expenses................. 139,042 43,351 22,866 3,760 (5) 209,019 ----------- ---------- ------------ ----------- ----------- Income from operations............. 68,866 32,875 15,034 (11,678) 105,097 Interest expense, net.............. 36,213 7,412 1,121 3,632 (6) 48,378 ----------- ---------- ------------ ----------- ----------- Income before income taxes......... 32,653 25,463 13,913 (15,310) 56,719 Income tax (benefit) expense....... (82,851) 8,752 4,904 (5,818) (7) (75,013) ----------- ---------- ------------ ----------- ----------- Net income......................... $ 115,504 $ 16,711 $ 9,009 $ (9,492) $ 131,732 =========== ========== ============ =========== ===========
Pro Forma Footnotes Nine months ended September 30, 2004: (1) Represents the historical operating results for United Industries for the nine months ended September 30, 2004, including the results of United Pet Group from July 30, 2004, its date of acquisition, through September 30, 2004, and Nu-Gro from April 30, 2004, its date of acquisition, through September 30, 2004. (2) Represents the historical operating results for United Pet Group for the period from January 1, 2004 to July 30, 2004. (3) Represents the historical operating results for Nu-Gro for the period from January 1, 2004 to April 30, 2004. (4) Represents an adjustment to record incremental depreciation expense related to property and equipment acquired in the United Pet Group acquisition based on estimated fair values. Such property and equipment is being depreciated using the straight-line method over varying periods, the average of which is approximately 10 years. The adjustment also includes a reclassification of $5.8 million from selling, general and administrative expenses related to freight costs to conform with the accounting treatment for such costs by United Industries. (5) Represents an adjustment to record incremental amortization expense related to intangible assets (other than goodwill) acquired in the United Pet Group and Nu-Gro acquisitions, based on estimated fair values. Intangible assets acquired included trade names, patents and customer relationships. The majority of acquired trade names are being amortized using the straight-line method over periods ranging from 5 to 40 years, while several trade names have been determined to have indefinite lives. Patents acquired and customer relationships are being amortized using the straight-line method over 15 years and 5 years, respectively. (6) Represents the change in interest expense related to the new senior credit facility executed by United Industries on April 30, 2004, a portion of the proceeds of which were used to finance the Nu-Gro acquisition, and the amendment of such senior credit facility on July 30, 2004, a portion of the proceeds of which were used to finance the United Pet Group acquisition. (7) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%. Twelve months ended December 31, 2003: (1) Represents the historical operating results for United Industries for the twelve-month period ended December 31, 2003. (2) Represents the historical operating results for United Pet Group for the twelve-month period ended December 31, 2003. (3) Represents the operating results for Nu-Gro for the twelve-month period ended December 31, 2003 giving pro forma effect to the acquisition of Greenleaf Group. (4) Represents an adjustment to record incremental depreciation expense related to property and equipment acquired in the United Pet Group acquisition based on estimated fair values. Such property and equipment is being depreciated using the straight-line method over varying periods, the average of which is approximately 10 years. The adjustment also includes a reclassification of $7.7 million from selling, general and administrative expenses related to freight costs to conform with the accounting treatment for such costs by United Industries. (5) Represents an adjustment to record incremental amortization expense related to intangible assets (other than goodwill) acquired in the United Pet Group and Nu-Gro acquisitions, based on estimated fair values. Intangible assets acquired included trade names, patents and customer relationships. The majority of acquired trade names are being amortized using the straight-line method over periods ranging from 5 to 40 years, while several trade names have been determined to have indefinite lives. Patents acquired and customer relationships are being amortized using the straight-line method over 15 years and 5 years, respectively. (6) Represents the change in interest expense related to the new senior credit facility executed by United Industries on April 30, 2004, a portion of the proceeds of which were used to finance the Nu-Gro acquisition, and the amendment of such senior credit facility on July 30, 2004, a portion of the proceeds of which were used to finance the United Pet Group acquisition, as if the acquisitions and related financing activities had occurred on January 1, 2003. (7) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%. EX-99 3 rv99-2.txt EXHIBIT 99.2 EXHIBIT 99.2 Summary Unaudited Pro Forma Condensed Consolidated Financial Data The following table sets forth certain summary unaudited pro forma condensed consolidated financial data for Rayovac. The unaudited pro forma condensed consolidated statement of operations data for the fiscal year ended September 30, 2004 has been derived from Rayovac's audited statement of operations for the fiscal year ended September 30, 2004 and United's unaudited statement of operations for the nine months ended September 30, 2004 and the three months ended December 31, 2003, and gives effect to the acquisition by Rayovac of United, the acquisition by United of United Pet Group and Nu-Gro, the acquisition by Rayovac of Microlite, and related transactions, as if all such transactions had occurred on October 1, 2003. The unaudited pro forma condensed consolidated balance sheet data as of September 30, 2004 has been derived from Rayovac's audited balance sheet as of September 30, 2004 and United's unaudited balance sheet as of September 30, 2004, and gives effect to the acquisition of United and related transactions as if they occurred on September 30, 2004. The pro forma adjustments are based upon available information and certain assumptions that we consider reasonable. The pro forma results of operations are not necessarily indicative of the results of operations that would have been achieved had the transactions reflected therein been consummated on the dates indicated or that will be achieved in the future. The unaudited pro forma condensed consolidated financial data is only a summary and should be read in conjunction with "Capitalization," "Unaudited Pro Forma Condensed Consolidated Financial Data," "Selected Financial Data--Rayovac," "Selected Financial Data--United," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Rayovac's, United's, Microlite's, United Pet Group's and Nu-Gro's consolidated financial statements and the notes thereto included elsewhere in this offering memorandum. Fiscal Year Ended September 30, 2004(1) --------------------- ($ in millions) Statement of Operations Data: Net sales $ 2,392.3 Cost of goods sold 1,422.7 Restructuring and related charges-cost of goods sold (0.8) Gross profit 970.4 Operating expenses 746.0 Restructuring and related charges-operating expenses 12.2 Operating income 212.2 Income before income taxes 83.3 Net income from continuing operations(2) 144.0 Other Financial Data: EBITDA(3) $ 295.2 Adjusted EBITDA(3) 365.5 Net cash provided by operating activities 180.7 Capital expenditures 50.6 Depreciation and amortization (excluding amortization of debt issuance costs) 82.0 Ratio of total net debt to Adjusted EBITDA(4) 5.0x Ratio of Adjusted EBITDA to interest expense 2.8x Balance Sheet Data (at fiscal year end): Cash and cash equivalents $ 24.1 Working capital(5) 463.8 Total assets 3,161.4 Total debt 1,836.6 Total shareholders' equity 727.2 Notes to Summary Unaudited Pro Forma Condensed Consolidated Financial Data (1) A final determination of fair values and useful lives of certain assets, which cannot be made prior to the completion of the acquisition of United, may differ from preliminary estimates made by management. Any final adjustments may change the allocation of purchase price, which could affect the fair values assigned to the assets and liabilities, and could result in a change to the unaudited pro forma condensed consolidated financial data. (2) Includes an income tax benefit as a result of United's reversal of a tax valuation allowance of $104.1 million. (3) EBITDA represents net income from continuing operations plus interest expense, income tax expense, and depreciation and amortization (excluding amortization of debt issuance costs). Adjusted EBITDA consists of EBITDA plus restructuring and related charges of Rayovac included within cost of goods sold and operating expenses, management's estimates of first year synergies related to the acquisition of United, the normalization of Microlite's results and other adjustments described below. Rayovac management believes that the negative EBITDA recognized by Microlite for the period from October 1, 2003 until May 28, 2004, which period was prior to the acquisition of Microlite by Rayovac, is not indicative of normalized results due to the significance of certain changes to Microlite's business implemented by Rayovac. These changes include price increases across all battery product lines; rationalization of Microlite's product lines, resulting in the discontinuance of certain low margin products; and the implementation of operational improvements which Rayovac management expects to generate manufacturing efficiencies. EBITDA and Adjusted EBITDA are measures commonly used by financial analysts in evaluating operating performance. Accordingly, management believes that EBITDA and Adjusted EBITDA may be useful for potential purchasers of notes in assessing our operating performance and our ability to meet our debt service requirements. EBITDA and Adjusted EBITDA, as used herein, are not necessarily comparable to similarly titled measures of other companies. The items excluded from EBITDA and Adjusted EBITDA are significant in assessing our operating results and liquidity. EBITDA and Adjusted EBITDA should not be considered in isolation from, or as an alternative to, operating income, cash flow or other combined income or cash flow data prepared in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA are calculated from net income from continuing operations and reconciled to net cash provided by operating activities as follows: Fiscal Year Ended September 30, 2004 ------------------ ($ in millions) Net income from continuing operations $ 144.0 Interest expense 129.9 Income tax benefit (60.7) Depreciation and Amortization 82.0 ------------- EBITDA 295.2 Rayovac adjustments(a) 28.7 United adjustments(b) 31.1 Management's preliminary estimate of first year synergies 10.5 ------------- Adjusted EBITDA 365.5 Interest expense, less amortization (118.8) Other non-cash adjustments 22.1 Changes in assets and liabilities, net of acquisitions 2.0 Current income taxes, cash special charges and other (90.1) ------------- Net cash provided by operating activities 180.7 ============= (a) Rayovac's adjustments to arrive at Adjusted EBITDA include the following ($ in millions): Restructuring and related charges $ 11.4 Normalization of Microlite results 8.1 Costs associated with Remington integration 4.0 Costs and expenses related to defense and settlement of class action lawsuit, preparation for abandoned capital transaction, resolution of certain state tax matters and tax consulting services 3.2 Costs associated with corporate relocation to Atlanta 2.0 ------- $ 28.7 ======= (b) United's adjustments to arrive at Adjusted EBITDA include the following ($ in millions): Fair value increase to acquired value of inventory of United Pet Group and Nu-Gro $ 9.3 United Pet Group warrant interest incurred prior to the acquisition by United 6.9 Restructuring and integration costs associated with the United Pet Group and Nu-Gro acquisitions 5.6 United Pet Group transaction costs incurred in conjunction with its sale to United 7.3 United Pet Group debt issuance costs written off in conjunction with its sale to United 1.5 Non-cash stock based compensation 0.5 -------- $ 31.1 ======== (4) Total net debt is defined as total debt, less cash and cash equivalents. (5) Working capital is defined as current assets less current liabilities. EX-99 4 rv99-3.txt EXHIBIT 99.3 EXHIBIT 99.3 Summary Financial Data--United The following table sets forth United's summary financial data. The condensed consolidated financial data of United as of December 31, 2002 and December 31, 2003 and for each of the years ended December 31, 2001, 2002 and 2003 have been derived from United's audited consolidated financial statements included elsewhere in this offering memorandum. The condensed consolidated financial data as of and for the nine months ended September 30, 2003 and September 30, 2004 have been derived from United's unaudited consolidated financial statements included elsewhere in this offering memorandum. The summary financial data for the nine months ended September 30, 2004 includes the results of Nu-Gro from the date United acquired it on April 30, 2004 and the results of United Pet Group from the date United acquired it on July 30, 2004. The unaudited condensed consolidated pro forma statements of operations for United for the year ended December 31, 2003 and for the nine months ended September 30, 2004 have been derived from United's unaudited pro forma condensed consolidated financial information for the year ended December 31, 2003 and the nine months ended September 30, 2004, respectively, included elsewhere in this offering memorandum, which unaudited pro forma condensed consolidated financial information gives effect to the acquisition of Nu-Gro and United Pet Group at the beginning of the periods presented. The unaudited condensed consolidated financial data as of and for the nine months ended September 30, 2003 and September 30, 2004 and the unaudited pro forma condensed consolidated financial information for the nine months ended September 30, 2004 reflect all adjustments (consisting of normal, recurring adjustments) which are, in the opinion of United's management, necessary for a fair presentation of United's financial statements, results of operations and cash flows as of and for the periods presented. The pro forma results are not necessarily indicative of United's results had the acquisitions reflected therein been consummated on the dates indicated and the results included below and elsewhere in this offering memorandum are not necessarily indicative of United's future performance, and results of operations for the nine months ended September 30, 2004 are not necessarily indicative of the results of United's operations for the full year. This information is only a summary and should be read in conjunction with "Selected Financial Data--United," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and United's, United Pet Group's and Nu-Gro's consolidated financial statements and United's unaudited pro forma condensed consolidated financial information and the notes thereto included elsewhere in this offering memorandum. A final determination of fair values and useful lives of certain assets of United Pet Group and Nu-Gro may differ from preliminary estimates made by United's management. Any final adjustments may change the allocation of purchase price, which could affect the fair values assigned to the assets and liabilities, and could result in a change to the unaudited pro forma condensed consolidated financial data.
Fiscal Year Ended December 31, Nine Months Ended September 30, ---------------------------------------------- --------------------------------------- Pro Forma (As Restated) Pro Forma 2001 2002(1) 2003 2003 2003(2) 2004 2004 ------- ------- ------ --------- ------------ -------- ---------- ($ in millions) Statement of Operations Data: Net sales $ 273.3 $ 480.0 $ 536.1 $ 923.3 $ 488.8 $ 593.6 $ 803.1 Cost of goods sold(3)(4) 148.4 305.6 328.2 609.2 297.3 392.8 546.5 Gross profit 124.9 174.4 207.9 314.1 191.5 200.8 256.6 Operating expenses 80.2 113.2 139.0 209.0 111.5 138.2 187.7 Income from operations 44.7 61.2 68.9 105.1 80.0 62.7 68.9 Income before income taxes 8.9 28.8 32.7 56.7 52.4 28.7 29.2 Net income(5) 6.7 25.3 115.5 131.7 31.6 21.3 18.6 Other Financial Data: EBITDA(6) $ 49.7 $ 71.4 $ 85.5 $ 142.0 $ 92.2 $ 86.8 $ 104.2 Adjusted EBITDA(6) 58.2 72.9 86.8 145.1 93.4 96.5 135.3 Net cash provided by operating activities 25.4 38.2 17.3 47.0 86.4 Capital expenditures 7.9 10.5 11.7 6.7 12.0 Depreciation and amortization (excluding amortization of debt issuance costs)(7) 4.9 10.2 16.6 36.9 12.1 24.1 35.3 Balance Sheet Data (at period end): Cash and cash equivalents $ -- $ 10.3 $ 11.4 $ 44.1 $ 8.3 Working capital (9.5) 50.8 82.5 101.6 180.1 Total assets 272.6 386.0 479.9 403.6 1,054.7 Total debt, including capital lease obligation 351.8 404.9 392.2 392.8 872.3 Total shareholders' equity (deficit) (144.4) (96.2) 15.1 (67.7) 68.2
- ----------------------------------------------- (1) United's historical operating results for the year ended December 31, 2002 include the operating results of Schultz from May 9, 2002, the date of merger, and WPC Brands from December 6, 2002, the date of acquisition. (2) United had initially reflected the guidance outlined in EITF 02-17, "Recognition of Customer Relationship Intangible Assets Acquired in a Business Combination" as of the date United finalized the allocation of the purchase price in connection with its acquisition of Schultz, in the first quarter of 2003, and began amortizing the customer relationship intangible asset over its remaining useful life. In March 2004, United determined that the effect of the application of EITF 02-17 should have been applied from the date of acquisition and, as such should have resulted in a $2.4 million non-cash charge for the additional amortization related to the final valuation of the $24.6 million customer relationship intangible asset. Accordingly, United restated the March 31, 2003 quarterly financial information to include the non-cash adjustment, which has increased first quarter 2003 selling, general and administrative expenses by $2.4 million and decreased income before income tax expense and net income by $2.4 million, as the intangible assets are not deductible for tax purposes. (3) Cost of goods sold for the nine months ended September 30, 2004 includes a $9.3 million inventory write-up for inventory recorded at fair value in connection with the Nu-Gro and United Pet Group acquisitions in April 2004 and July 2004, respectively. Cost of goods sold for the year ended December 31, 2003 includes a $1.3 million inventory write-up for inventory recorded at fair value in connection with the WPC Brands acquisition in December 2002. Cost of goods sold for the year ended December 31, 2002 includes a $1.5 million inventory write-up for inventory recorded at fair value in connection with the Schultz merger in May 2002. (4) During the year ended December 31, 2001, United recorded an $8.5 million charge, of which $5.6 million was recorded in facilities and organizational rationalization related to a warehouse consolidation project and severance costs associated with an early voluntary retirement program, $2.7 million was recorded in cost of goods sold as a result of obsolete inventory related to the discontinuance of a product, and $0.2 million was recorded in selling, general and administrative expenses. In addition, selling, general and administrative expenses for the year ended December 31, 2003 includes a $2.4 million non-cash charge for additional amortization related to the final valuation of the $24.6 million customer relationship intangible asset acquired in United's merger with Schultz as previously described in note (2) above. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations--United--Other Events and Recent Strategic Transactions." (5) During the year ended December 31, 2003, United determined it was more likely than not that it would fully utilize its deferred tax assets and, accordingly, it fully reversed the valuation allowance of $104.1 million resulting in an income tax benefit for the year ended December 31, 2003. (6) EBITDA represents net income plus interest expense, income tax expense, depreciation and amortization (excluding amortization or write-off of debt issuance costs). Adjusted EBITDA consists of EBITDA plus non-cash charges included within operating expenses, such as depreciation and amortization expense associated with the write-up of fixed assets and intangible assets acquired from Nu-Gro and United Pet Group to estimated fair value on their acquisition dates, as required by purchase accounting, and other non-cash expenses, and nonrecurring charges included within operating expenses, such as rationalization of certain facilities and organizational activities in 2001. EBITDA and Adjusted EBITDA are measures commonly used by financial analysts in evaluating performance. Accordingly, management believes that EBITDA and Adjusted EBITDA may be useful for potential purchasers of notes in assessing our operating performance and our ability to meet our debt service requirements. EBITDA and Adjusted EBITDA, as used herein, are not necessarily comparable to similarly titled measures of other companies. The items excluded from EBITDA and Adjusted EBITDA are significant in assessing our operating results and liquidity. EBITDA and Adjusted EBITDA should not be considered in isolation from, or as an alternative to, operating income, cash flow or other combined income or cash flow data prepared in accordance with U.S. GAAP. EBITDA and Adjusted EBITDA are calculated from net income and reconciled to operating income as follows:
Fiscal Year Ended Nine Months Ended December 31, September 30, ---------------------------------- --------------------------- Pro (As Pro Forma Restated) Forma 2001 2002 2003 2003 2003 2004 2004 ------ ------ ------ -------- --------- ------- ------- ($ in millions) Net income $ 6.7 $ 25.3 $ 115.5 $ 131.7 $ 31.6 $ 21.3 $ 18.6 Interest expense, net 35.8 32.4 36.2 48.4 27.6 33.9 39.7 Income tax expense (benefit) 2.2 3.4 (82.9) (75.0) 20.8 7.5 10.6 ------ ------ ------ -------- --------- ------- ------- Operating income 44.7 61.2 68.9 105.1 80.0 62.7 68.9 Depreciation and amortization 4.9 10.2 16.6 36.9 12.1 24.1 35.3 ------ ------ ------ -------- --------- ------- ------- EBITDA 49.7 71.4 85.5 142.0 92.2 86.8 104.2 Fair value increase to acquired inventory -- 1.5 1.3 3.1 1.3 9.3 9.3 Non-cash stock based compensation -- -- -- -- -- 0.5 0.5 Nonrecurring expenses: United Pet Group warrant interest incurred prior to the acquisition by United -- -- -- -- -- -- 6.9 Restructuring and integration costs associated with the United Pet Group and Nu-Gro acquisitions -- -- -- -- -- -- 5.6 United Pet Group transaction costs incurred in conjunction with its sale to United -- -- -- -- -- -- 7.3 United Pet Group deferred financing costs write-off -- -- -- -- -- -- 1.5 Facilities and organizational rationalization 8.5 -- -- -- -- -- -- ------ ------ ------ -------- -------- ------- ------ Adjusted EBITDA $ 58.2 $ 72.9 $ 86.8 $ 145.1 $ 93.4 $ 96.5 $135.3 ====== ====== ======= ========= ======== ======= ====== (7) In accordance with current accounting standards, depreciation and amortization for the years ended December 31, 2003 and 2002 does not include amortization of goodwill. The year ended December 31, 2001 includes amortization expense related to goodwill of less than $0.1 million. Depreciation and amortization for the year ended December 31, 2003 includes a $2.4 million non-cash charge for additional amortization related to the final valuation of the $24.6 million customer relationship intangible asset acquired in United's merger with Schultz. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations--United--Other Events and Recent Strategic Transactions."
EX-99 5 rv99-4.txt EXHIBIT 99.4 EXHIBIT 99.4 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA The following unaudited pro forma condensed consolidated balance sheet as of September 30, 2004 and the unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 are based on the consolidated financial statements of Rayovac and United after giving effect to Rayovac's acquisition of Microlite, United's acquisitions of Nu-Gro and United Pet Group and consummation of the respective transactions, including the acquisition of United, and the assumptions and adjustments described in the accompanying notes to the unaudited pro forma condensed consolidated financial data. The unaudited pro forma condensed consolidated balance sheet as of September 30, 2004 has been derived from Rayovac's condensed consolidated balance sheet as of September 30, 2004 and United's unaudited consolidated balance sheet as of September 30, 2004, adjusted to give effect to the transactions as if they had occurred on September 30, 2004. The unaudited pro forma condensed consolidated statement of operations data for the fiscal year ended September 30, 2004 has been derived from Rayovac's audited statement of operations data for the fiscal year ended September 30, 2004 and United's unaudited statement of operations data for the nine months ended September 30, 2004 and the three months ended December 31, 2003. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 gives effect to the transactions as if they occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations for the fiscal year ended September 30, 2004 gives effect to United's acquisition of Nu-Gro, which occurred on April 30, 2004, Rayovac's acquisition of Microlite, which occurred on May 28, 2004, and United's acquisition of United Pet Group, which occurred on July 30, 2004, and the acquisition of United by Rayovac as if each acquisition occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations excludes non-recurring items directly attributable to the transactions. The unaudited pro forma condensed consolidated financial data are based on preliminary estimates and assumptions set forth in the notes to such information. Pro forma adjustments are necessary to reflect the estimated purchase price for the respective transactions, the new debt and equity structure and to adjust amounts related to United's assets and liabilities to a preliminary estimate of their fair values. Pro forma adjustments are also necessary to reflect interest expense and the income tax effect related to the pro forma adjustments. The pro forma adjustments and allocation of purchase price are preliminary and are based on management's estimates of the fair value of the assets acquired and liabilities assumed. The final purchase price allocation will be completed after asset and liability valuations are finalized. This final valuation will be based on the actual assets and liabilities of United that exist as of the date of the completion of the transactions as well as the actual assets and liabilities of Microlite that existed as of the date Rayovac acquired it and the actual assets and liabilities of Nu-Gro and United Pet Group as of the respective dates United acquired them. Any final adjustments may change the allocation of purchase price which could affect the fair value assigned to the assets and liabilities and could result in a change to the unaudited pro forma condensed consolidated financial data, including pro forma net income. In addition, the impact of integration activities, the timing of the completion of the transactions and other changes in United's assets and liabilities prior to completion of the transactions could cause material differences in the information presented. The unaudited pro forma condensed consolidated financial data are presented for informational purposes only and have been derived from, and should be read in conjunction with, "Selected Financial Data--Rayovac", "Selected Financial Data--United" and the consolidated financial statements of Rayovac and United, including the notes thereto. The pro forma adjustments, as described in the notes to the unaudited pro forma condensed consolidated financial data, are based on currently available information and certain adjustments that we believe are reasonable. They are not necessarily indicative of our consolidated financial position or results of operations that would have occurred had the transactions taken place on the dates indicated, nor are they necessarily indicative of future consolidated financial position or results of operations.
Unaudited Pro Forma Condensed Consolidated Balance Sheet As of September 30, 2004 Rayovac & United Pro Rayovac United Pro Forma Forma Corporation Industries Adjustments(1) Combined ------------ ---------- ------------- ------------- ($ in millions) ASSETS Current assets: Cash and cash equivalents $ 15.8 $ 8.3 $ -- $ 24.1 Accounts receivable, net 289.6 107.5 -- 397.1 Inventories 264.7 160.0 15.0 (2) 439.7 Deferred income taxes 19.2 -- 6.7 (3) 26.0 Other current assets 61.1 19.9 -- 81.0 ------------- ----------- ------------- ------------ Total current assets 650.5 295.7 21.7 967.9 Property, plant and equipment, net 182.4 99.4 -- 281.8 Goodwill 320.6 247.4 456.7 (4) 1,024.7 Intangible assets, net 422.1 310.9 -- 733.0 Deferred income taxes -- 78.5 -- 78.5 Other assets 60.4 22.8 (7.7)(5) 75.5 ------------- ----------- ------------- ------------ Total assets $ 1,636.0 $ 1,054.7 $ 470.7 $ 3,161.4 ============= =========== ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Current maturities of long-term debt $ 23.9 $ 6.7 $ (3.5)(6) $ 27.1 Accounts payable 228.0 41.7 -- 269.7 Accrued liabilities 146.7 67.2 (6.6)(6) 207.3 ------------- ----------- ------------- ------------ Total current liabilities 398.7 115.5 (10.0) 504.1 Long term debt, net of current maturity 806.0 865.7 137.8 (6) 1,809.5 Deferred income taxes 7.3 -- -- 7.3 Other non-current liabilities 106.6 5.3 -- 111.9 ------------- ----------- ------------- ------------ Total liabilities $ 1,318.5 $ 986.5 $ 127.8 $ 2,432.8 ------------- ----------- ------------- ------------ Minority interest in equity of consolidated subsidiary 1.4 -- -- 1.4 Total shareholders' equity 316.0 68.2 342.9 (7) 727.2 ------------- ----------- ------------- ------------ Total liabilities and shareholders' equity $ 1,636.0 $ 1,054.7 $ 470.7 $ 3,161.4 ============= =========== ============= ============ Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet (1) The total estimated consideration as shown in the table below is allocated to the assets and liabilities of United as if the transactions had occurred on September 30, 2004. The allocation set forth below is preliminary. The unaudited pro forma condensed consolidated financial information assumes that the historical values of United's current assets, current liabilities and property plant and equipment approximate fair value, except as adjusted, pending forthcoming appraisals and other financial information. The allocation of consideration to acquired intangible assets is subject to the outcome of independent appraisals to be conducted after the completion of the transactions. A pro forma allocation of the consideration to the identifiable intangible assets of United has not been performed below, instead all residual consideration has been allocated to goodwill. The actual amounts recorded when the combination transactions are completed may differ materially from the pro forma amounts presented below. Total purchase price ($ in millions): Issuance of Rayovac common stock $ 439.2 Cash consideration 70.0 Assumption of United debt 871.4 Acquisition related costs 33.7 --------- $ 1,414.3 ========= Preliminary allocation of purchase price, reflecting the transactions ($ in millions): Estimated adjustments to reflect assets and liabilities at fair value: Historical value of assets acquired, excluding goodwill, as of September 30, 2004 $ 807.3 Historical values of liabilities assumed (986.5) Write-off of United deferred financing fees (19.9) Adjustment to eliminate United bond premium 1.0 Current deferred tax asset recognized in association with the write-off of United deferred financing fees 7.5 Inventory valuation 15.0 Current deferred tax liability recognized on inventory valuation (5.7) Assumption of United debt 871.4 Direct acquisition costs 20.0 Goodwill acquired (including $247.4 million of pre-acquisition goodwill) 704.2 --------- $ 1,414.3 ========= (2) Adjustment to the estimated purchase accounting valuation related to inventory. (3) Tax benefits associated with the anticipated write-off of Rayovac and United unamortized debt issuance costs and purchase accounting adjustments to inventory. (4) Estimated preliminary fair market value of incremental goodwill associated with the transactions. (5) Write-off of United unamortized debt issuance costs of approximately $19.9 million and Rayovac unamortized debt issuance costs of $12.9 million related to debt to be refinanced less the estimated $25.0 million of deferred financing costs to be incurred in connection with the transactions. (6) Net additional debt incurred after repayment of United debt, $868.8 million, and accrued interest, $4.7 million, at September 30, 2004. (7) Reflects the following adjustments affecting equity ($ in millions except per share data): Issuance of common stock (13.75 million shares at $31.94) $ 439.2 Direct acquisition costs (20.0) Historical value of United net assets acquired (68.2) Rayovac debt financing cost write-off, net of tax (8.0) -------- $ 342.9 ======== Note: The stock price of $31.94 used in the calculation of the purchase price is based on a five day closing price average beginning on December 30, 2004.
Unaudited Pro Forma Condensed Consolidated Statement of Operations Fiscal Year Ended September 30, 2004 ($ in millions) Rayovac Pro Forma Rayovac United United Pet Corporation Microlite(1) Adjustments Combined Industries(5) Group(6) Nu-Gro(7) ----------- ---------- ----------- ---------- ----------- ---------- --------- Consolidated Statement of Operations Net sales $ 1,417.2 $ 37.6 $ -- $ 1,454.8 $ 640.9 $ 206.8 $ 89.8 Cost of goods sold 811.9 28.3 -- 840.2 423.7 136.6 69.8 Restructuring and related charges (0.8) -- -- (0.8) -- -- -- ----------- ----------- ----------- ---------- ----------- ---------- --------- Gross profit 606.1 9.3 -- 615.4 217.2 70.3 20.0 Operating expenses: Selling, general and administrative expenses 437.7 15.7 3.2 (2) 456.6 165.7 55.3 11.8 Restructuring and related charges 12.2 -- -- 12.2 -- -- -- ----------- ----------- ----------- ---------- ----------- ---------- --------- 449.9 15.7 3.2 468.8 165.7 55.3 11.8 Operating income (loss) 156.2 (6.4) (3.2) 146.6 51.5 15.0 8.2 Interest expense 65.7 4.4 (2.2)(3) 67.8 42.5 7.3 0.6 Other expense (income), net 0.1 (0.1) -- -- -- -- -- Minority interest (0.1) -- -- (0.1) -- -- -- ----------- ---------- ----------- ---------- ----------- ---------- --------- Income (loss) from continuing operations before income taxes 90.5 (10.7) (1.0) 78.9 9.0 7.7 7.6 Income tax expense (benefit) 34.4 -- -- (4) 34.4 (96.2) 5.9 2.8 Net income from continuing operations $ 56.2 $ (10.7) $ (1.0) $ 44.5 $ 105.2 $ 1.8 $ 4.8 =========== =========== =========== ========== =========== ========== ========= Basic net income per common share $ 1.68 =========== Weighted average shares of common stock outstanding 33,433,000 =========== Diluted net income per common share $ 1.62 =========== Weighted average shares of common stock outstanding 34,620,000 =========== [Table continued] Unaudited Pro Forma Condensed Consolidated Statement of Operations Fiscal Year Ended September 30, 2004 ($ in millions) Rayovac & United United Pro Pro Forma Industries Pro Forma Forma Adjustments Combined Adjustments Combined ----------- ----------- ----------- ------------ Consolidated Statement of Operations Net sales $ -- $ 937.5 $ -- $ 2,392.3 Cost of goods sold 7.9 (8) 638.0 (55.5)(12) 1,422.7 Restructuring and related charges -- -- -- (0.8) ----------- ----------- ----------- ------------ Gross profit (7.9) 299.5 55.5 970.4 Operating expenses: Selling, general and administrative expenses 1.1 (9) 233.9 55.5 (12) 746.0 Restructuring and related charges -- -- -- 12.2 ----------- ----------- ----------- ------------ 1.1 233.9 55.5 758.2 Operating income (loss) (9.0) 65.6 -- 212.2 Interest expense 1.2 (10) 51.6 10.4 (13) 129.9 Other expense (income), net -- -- (0.9)(14) (0.9) Minority interest -- -- -- (0.1) ----------- ----------- ----------- ------------ Income (loss) from continuing operations before income taxes (10.3) 14.0 (9.5) 83.3 Income tax expense (benefit) (3.9)(11) (91.5) (3.6)(15) (60.7) (16) Net income from continuing operations $ (6.4) $ 105.5 $ (5.9) 144.0 =========== =========== =========== ============ Basic net income per common share $ 3.05 ============ Weighted average shares of common stock outstanding 47,183,000 (17) ============ Diluted net income per common share 2.98 ============ Weighted average shares of common stock outstanding 48,370,000 (17) ============
Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations (1) Represents the unaudited historical operating results for Microlite for the period from October 1, 2003 to May 28, 2004. (2) Reclassification of Microlite expenses from interest expense to selling, general and administrative expenses to conform to the Rayovac presentation. (3) Reclassification of Microlite expenses to conform to Rayovac's presentation, net of additional interest expense of $0.9 million incurred in connection with the acquisition of Microlite. (4) No net income tax benefit has been recognized in connection with Microlite's operating loss for the period from October 1, 2003 to May 28, 2004. Based on historical levels of income and the length of time required to utilize its deferred tax assets, Rayovac determined that it was more likely than not that it would not fully utilize its Microlite deferred tax assets and therefore recorded a valuation allowance against the benefit of such losses. (5) Represents the historical operating results for United for the twelve-month period ended September 30, 2004, including the results of United Pet Group from July 30, 2004, its date of acquisition, through September 30, 2004, and Nu-Gro from April 30, 2004, its date of acquisition, through September 30, 2004. (6) Represents the historical operating results for United Pet Group for the period from October 1, 2003 to July 30, 2004. (7) Represents the historical operating results for Nu-Gro for the period from October 1, 2003 to April 30, 2004. (8) Represents a reclassification of $7.7 million of United Pet Group freight costs from selling, general and administrative expenses to conform with the accounting treatment for such costs by United. The adjustment also includes an adjustment to record incremental depreciation expense related to property and equipment acquired in the United Pet Group acquisition based on estimated fair values. Such property and equipment is being depreciated using the straight-line method over varying periods, the average of which is approximately 10 years. (9) Represents an adjustment to record approximately $8.8 million of incremental amortization expense related to intangible assets (other than goodwill) acquired in the United Pet Group and Nu-Gro acquisitions, based on estimated fair values. Intangible assets acquired included trade names, patents and customer relationships. The majority of acquired trade names are being amortized using the straight-line method over periods ranging from 5 to 40 years, while several trade names have been determined to have indefinite lives. Patents acquired and customer relationships are being amortized using the straight-line method over 15 years and 5 years, respectively. This adjustment is partially offset by the reclassification of $7.7 million of United Pet Group freight costs from selling, general and administrative expenses to cost of goods sold to conform with the accounting treatment for such costs by United. (10) Represents the change in interest expense related to the senior credit facility executed by United on April 30, 2004, a portion of the proceeds of which were used to finance the Nu-Gro acquisition, and the amendment of such senior credit facility on July 30, 2004, a portion of the proceeds of which were used to finance the United Pet Group acquisition. (11) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%. (12) Represents a reclassification of freight costs from cost of goods sold to selling, general and administrative expenses to conform with the accounting treatment for such costs by Rayovac. (13) Represents increased interest expense, net of a reclassification of interest income, associated with the debt issued and refinanced in connection with the transactions. The effect of a 0.125% change in the expected interest rate on the approximately $739 million of variable rate debt to be incurred in connection with the transactions is approximately $0.9 million. (14) Represents a reclassification of interest income from interest expense, net, to conform to Rayovac's presentation. (15) Represents the income tax benefit associated with the adjustments described herein to arrive at an estimated pro forma 2004 statutory tax rate of 38%. (16) Includes a reduction of income tax expense of $104.1 million, reflecting a full reversal of United's valuation allowance originally established against the tax deductible goodwill deduction and certain net operating loss carryforwards that were generated in 1999 through 2003. Based on historical levels of income and the length of time required to utilize its deferred tax assets, Rayovac determined that it was more likely than not that it would fully utilize its deferred tax assets and that it was no longer necessary to maintain a valuation allowance. The following table excludes this one-time adjustment from income tax expense in arriving at net income ($ in millions):
Rayovac & United Pro Forma Tax Pro Forma Combined Adjustment Adjusted ------------- -------------- ----------- Income from continuing operations before income taxes $ 83.3 $ -- $ 83.3 Income tax expense (benefit) (60.7) 104.1 43.4 ------------- -------------- ----------- Income from continuing operations $ 144.0 $ (104.1) $ 39.9 ------------- -------------- -----------
(17) Increase to weighted average shares outstanding due to the assumed issuance of 13.75 million shares of Rayovac common stock on October 1, 2003. -----END PRIVACY-ENHANCED MESSAGE-----